Diabetes has slightly more impact, statistically, on men's sexual function than on women's, but about half of both are affected. There are multiple reasons, most likely, which include neuropathy (impaired nerve function), vascular disease (narrowing of blood vessels for less circulation), and possible psychological issues. In women, that combination translates into lower interest, slower arousal, less lubrication, more difficulty experiencing orgasm, and the possibility of pain with intercourse.
As you often read, diabetes is a rapidly growing epidemic in the U.S., with obesity as the number one risk factor for developing the disease. Once again, maintaining overall health is vitally important to preserving sexual health.